San Francisco Public Defender Jeff Adachi stands in his in San Francisco, Calif., office on Friday, Feb. 20, 2009. Adachi is the producer of "You Don't Know Jack: The Story of Jack Soo", which will be featured in the 2009 San Francisco International Asian American Film Festival.

San Francisco, a union town and progressive haven, might seem to be the unlikeliest place for a battle over whether to pare back benefits to public employees. Public Defender Jeff Adachi, a stalwart of the left, is the equally unlikely champion of a pension reform initiative that has jolted organized labor into full combat mode even as the measure awaits certification for the ballot.

But the crisis over escalating pension and health care costs that has been brewing for years - and ignored by all but a few lonely fiscal conservatives - has reached the breaking point.

"This is like the dot-com bubble bursting," said Susan Kennedy, chief of staff to Gov. Arnold Schwarzenegger, whose attempt to make pension reform a centerpiece of his 2005 agenda proved a nonstarter in Sacramento.

In recent weeks, Schwarzenegger reached deals with six of the state's 12 employee bargaining units to make pension benefits less generous to new hires. Benefits to existing retirees would not be affected. The governor has insisted that completion of the 2010-11 budget must be accompanied by pension reform - and, this time, he is likely to get it.

The sense of urgency about the rising burden of retiree benefits has hit local governments in areas urban and rural, rich and poor, conservative and liberal. Los Angeles Mayor Antonio Villaraigosa, a Democrat, is asking voters to scale back pensions for police and firefighters. Oakland Councilwoman Rebecca Kaplan, seeking a niche against establishment favorite Don Perata in the mayor's race, has proposed a ballot measure to require new police officers to contribute more toward their pension. Rising pension costs represent an estimated $91 million of a $142 million budget deficit in San Bernardino County.

The origin of these fiscal crises can be traced to 1999, when Gov. Gray Davis and the Democrat-controlled Legislature approved a succession of bills that enriched pension benefits for state workers. Davis and the legislators made these lavish commitments on the faulty assumption that they would not cost the general fund a cent, that robust investments would keep the system fully funded for many years to come.

Many county and city governments then gave similar deals to their workers.

It looked like easy money in the headiness of 1999. It would have worked out as painlessly as advertised if the Dow Jones industrial average was at 25,000 today, instead of hovering around 10,000. When investments fall short, governments must dig into their general funds.

"It's like going to Vegas with your brother-in-law's paycheck," Adachi said of the retirement funding system. "It doesn't matter if you win or lose, you're going to be made whole."

To put the shortfalls in perspective, the state will be spending more than $6 billion this year to cover pension and retiree health care costs - roughly equal to its annual support for the UC and CSU systems, where the 670,000 students are being hit with sharp fee increases.

Adachi emphasized that he was not blaming workers for the miscalculations behind this mess. But he said it was in everyone's interest to develop a sustainable system. His ballot measure would increase all city workers' contributions (which range from nothing to 7.5 percent) to a baseline of 9 percent. Police and fire employees, who now contribute 7.5 percent (new hires, 9 percent), would contribute 10 percent.

"As pension costs increase, you see other services - vital services - squeezed," Adachi said. Therein lies his appeal to the left: These reforms are vital to preserving programs they cherish.

Some erstwhile advocates of pension restraint have balked at Adachi's plan. Mayor Gavin Newsom called it "extraordinarily complicated" and flawed, with potential for "unintended consequences." Newsom said it was better to work with labor on such reforms, as his administration has done in gaining incremental reforms on pension and health care. "What this does," Newsom said, "is shut that process down."

San Francisco's business community kept its distance from Adachi's signature drive, worried that the presence of a perceived anti-labor initiative could work against moderate candidates for the Board of Supervisors in November.

The unions have signaled that they are not going to swallow these cutbacks without a fight. They have enlisted Chris Lehane, a master strategist with stripes from the Clinton-Gore media wars. He suggested Adachi was using the issue as a springboard to a 2011 mayoral bid.

Don't be surprised if the impact on police and firefighters - heroes in any public opinion poll - becomes a central focus of the opposition campaign. Never mind that they represent about 20 percent of the affected workforce or that their pension contribution will rise no more than 2.5 percent of salary - compared with Muni operators and elected officials, who would go from zero to 9 percent. Expect to see plenty of uniforms in labor's campaign mailers.

"I'm not sure that taking on firefighters or police officers is the smartest route to political success," Lehane said. "You might as well take on Mother Teresa while you're at it - and call for Tim Lincecum to be traded to the Dodgers."